Medicaid planning can help you ensure that you can pay for long-term care without depleting your savings account. Many Americans need long-term nursing for at least a year, but most families cannot pay for nursing home costs. Someone who turns 65 today in the United States has a 70% chance of requiring some type of long-term care. Of those who need long-term care, 20% will need to live in a skilled nursing facility for at least five years. 

The national median cost for long-term care is over $100,000 per year for a private room, and the average length of stay in a nursing home is 835 days. Even seniors who have meticulously saved for their retirement cannot afford these expensive nursing home costs. One way to ensure that you can pay for nursing home care without losing all of your savings is to hire a lawyer who will help you engage in Medicaid planning. Medicaid planning involves ensuring that you qualify for needs-based nursing home coverage through your state’s Medicaid program. An experienced estate planning lawyer will help you understand how you can be eligible for Medicaid. We’ve listed some of the essential tips for Medicaid planning below.


Understand that Medicare Will Not Cover Nursing Home Stays

Understanding the difference between Medicare and Medicaid is hard. Many elderly adults assume that since they qualify for Medicare, a nursing home stay will be covered. Medicare does not cover long-term nursing home stays, however. Medicare will cover some stays in skilled nursing home facilities, but only for a maximum of 100 days. In other words, Medicare will only cover skilled nursing when the patient needs a temporary stay after surgery or after a debilitating fall. When the patient needs skilled nursing care longer than that, the patient must pay out of pocket or apply for Medicaid. 

Unfortunately, it can be difficult to successfully apply for Medicaid in an emergency, such as when a patient’s Medicare coverage is about to run out. At our Law Firm, we have helped many families who need urgent Medicaid coverage. It is best to begin Medicaid planning as early as possible to avoid this type of critical situation. Only Medicaid will cover long-term stays in skilled nursing home facilities, but qualifying for Medicaid can be challenging because it is a needs-based program. 


Begin Medicaid Planning as Soon as Possible

If you are retired or headed towards retirement, the best time to engage in Medicaid planning is now. The regulations regarding Medicaid eligibility are complex. Sometimes our clients assume that they will simply give all of their assets to their children or loved ones to qualify for Medicaid long-term care benefits. However, Medicaid has a lookback period of five years, and anything you give away within that five years can count against you when it comes to qualifying for Medicaid benefits. Ideally, you should begin planning for Medicaid coverage at least five years before you will need to enter a skilled nursing facility. Regardless of your situation, do not delay. The longer you wait to engage in Medicaid planning, the more you could risk financially in the future.


You Need to Demonstrate Financial Need to Qualify

Medicaid is a needs-based benefits program. In other words, you will need to show that you have $2,000 or less in countable assets, not including your vehicle or home, to qualify for Medicaid benefits. Every state has a different maximum income for qualification, but they are all strict regarding eligibility. It is wise to begin Medicaid planning as soon as possible so you can prevent an emergency in which you need Medicaid coverage now but still have far too many countable assets to qualify.


Create an Irrevocable Trust

One of the best ways to qualify for Medicaid coverage while protecting your retirement savings is to set up an irrevocable trust. Irrevocable trusts help protect people’s assets from the burdensome cost of long-term care. Most people need long-term care for at least one year, resulting in fees above $100,000. If someone needs multiple years of nursing home care, the cost will add up to over $300,000. For many Americans, the cost of a nursing home stay would completely wipe out their entire life savings and put their property ownership at risk. None of us wants to see our hard-earned income wasting away in the face of long-term health care.

Estate planning attorneys help their customers by creating an irrevocable trust that protects their clients’ savings. An irrevocable trust is a legal document that allows you to transfer assets into the trust. You can create an irrevocable trust and transfer ownership of your assets and property into the trust. The trust will manage your property until your chosen beneficiaries receive the property. When you create an irrevocable trust and transfer your property into the trust, you will no longer own the property. You will not have access to the assets, and you will not be able to revoke the trust and take your assets back. For this reason, any assets or property you transfer into the trust will not count against you as income or assets to qualify for Medicaid.


Contact an Estate Planning Lawyer

Qualifying for Medicaid is complicated, and you need an experienced estate planning lawyer on your side to do so. If you anticipate requiring nursing home care in the next 10 years, it is essential to talk to an estate planning lawyer. Whether you plan to give your assets to a family member or place them into an irrevocable trust, you need to ensure that the transfer does not disqualify you or penalize you in terms of qualifying for Medicaid. For more information about Medicaid planning, contact the experienced lawyers at Commonwealth Elder Law today to schedule your initial consultation.